A number of industry analysts believe that Azerbaijan can provide a substantial advancement to key European oil and gas projects. The leaders of the European Union have not recognized the significance of Azerbaijan for laying oil and gas pipelines that would deliver fuel to Europe. 

The country of Azerbaijan has a relatively developed energy sector. Azerbaijan exports oil abroad through the Baku-Tbilisi-Ceyhan pipeline. Large reserves of natural gas have also been confirmed in Azerbaijan. The volume of natural gas turned out to be larger than expected originally.

Azerbaijan’s importance is also considered high against the backdrop of future transits of gas from Turkmenistan. The change of government in Ashkhabad in 2006 prompted Europe’s industry experts and energy executives to talk about Turkmenistan’s gas potential. Many countries have already stated that they have interest in Turkmenistan’s reserves, including Russia, India, Iran, and China. Europeans for quite some time have been talking about providing the money to run the pipeline under the Caspian Sea to deliver gas from Turkmenistan to Europe.

The Southern Gas Corridor project envisions channeling gas from Azerbaijan as well as Turkmenistan to European consumers.

If Turkmenistan chooses not to participate in the Southern Corridor project, the only hope for delivering gas from the Caspian region to the EU countries would be to construct a pipeline linking Azerbaijan, Turkey, Greece, and Italy. Azerbaijan has put in great efforts to advance this project.

In spite of the attempts at achieving political and economic rapprochement with Europe, Azerbaijan has not yet succeeded in establishing a first-rate relationship with European states. The President of Azerbaijan Ilham Aliyev expressed frustration to EU leadership with Europe’s refusal to support the country’s claims to Nagorno-Karabakh. The country is involved in a dispute with Armenia over the status of the province. The conflict between Georgia and Russia made Azerbaijan even more preoccupied with the future of Nagorno-Karabakh.

In contrast to Georgia, Azerbaijan did not consider relations with the European Union and NATO as its chief priority. Baku continues to maintain a balance with Russia, Iran, Europe, Turkey, and the U.S.

The lack of definitive commitments in Azerbaijan’s foreign policy illustrates that opportunities for entering the country’s energy sector have not been taken yet. In addition to Europe, Russian and Iran have already offered to give EU market price for Azerbaijan’s gas. 

If Azerbaijan continues its multi-vector policy and decides to supply some of its gas to Russia, some to Turkey, some to Iran, and some to Europe via Italy and Greece, the transportation of gas across the Caspian Sea would not be any longer commercially viable. In that case, the transportation of gas from Turkmenistan to Europe would be delayed. 

Because no special incentives are extended by the European consumers, Azerbaijan’s officials are not likely to feel interested to sign on to the Southern Corridor project and risk jeopardizing relations with Russia. It would be shortsighted for officials in Brussels to leave the offer they made to Azerbaijan without providing any tangible economic and political advantages to the country’s leadership.